Multi-level Competencies - TalentGuard

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Multi-level competencies:BUILDING A FOUNDATION FOR STRATEGIC HR

Today, virtually every organization with more than300 people uses some form of competency-basedhuman resource management.1Why have competencies emerged as the goldstandard for talent management?The first reason is that they work. Research shows thatcompetency-based selection leads to lower turnoverand higher performance2. A 2009 study showed thatorganizations using core competencies enjoy greaterprofitability, customer satisfaction levels, and customerretention than other organizations3.Companies that usecompetencies enjoy:63% reduction in turnover,improvement in19% employee performance,12.5% increase in sales & profits .The second reason is that they inspire. In over 25 years ofcompetency-based engagements, HRSG has seen the remarkable impact competencies can makeon the sense of autonomy, empowerment, focus, and pride that employees develop as a result of abetter, clearer understanding of their role and their potential within the organization.Competencies are effective because they go beyond the basic requirements of a job to identifythe behaviors that top performers demonstrate. Instead of focusing on WHAT a person typicallydoes on the job, competencies describe HOW a highly effective worker will achieve success. Mostimportantly, competencies describe those successful behaviors in terms that are OBSERVABLE.This enables HR professionals and managers to rely on objective criteria and measurable resultsrather than intuition and conjecture when evaluating and supporting performance. It also gives thewhole workplace—HR, managers, employees, and executives—a shared language for discussingand understanding workplace requirements and performance.Who uses competencies?Hewlett Packard, Google, United Nations, Pepsico, Volvo, McDonald’s, Starbucks, American Express,Johnson & Johnson, Coca-Cola, Toyota, Bank of America, BP, Wells Fargo, General Motors, HP, Radio Shack,HCA, Carlson Companies, BHP, IBM, General Electric, PDVSA, Anheuser-Busch, Girl Scouts USA, US FederalReserve, KPMG, Sanofi, Ingersoll-Rand, Lockheed Martin, Konica Minolta, Luminant, Prudential, Invensys,ConAgra, Expedia, DuPont, General Mills, Schlumberger, Grainger, and many more.1Boyatzis, R. E. (2008). Competencies in the 21st century. Journal of Management Development, 27(1).2 Rathbar-Daniels, Erickson, & Dalik. (2001). Here to Stay: Taking Competencies to the Next Level. Worldatwork Journal.3. Aberdeen, 20094. Spencer, L M. in Cherniss, C. and D. Goleman, eds. (2001) “The economic value of emotional intelligence competencies and EIC-basedHR programs”, in The Emotionally Intelligent Workplace: How to Select for, Measure, and Improve Emotional Intelligence in Individuals,Groups and Organizations.—2—4

Single level. Multi-level. What’s the difference?While competencies are widely used to manage talent, there is still confusionaround the different types of competency content available.Many HR professionals use some form of competency-based management within theorganization. Those who work in large organizations with extensive HR resources may developtheir own competency content in house. Others choose to purchase or license the use ofcompetency content from competency specialists such as HRSG.Whether they create content internally or purchase it from an external source, the most valuablecompetencies are those that articulate multiple, progressive levels of proficiency, from entry levelto mastery.Why do multi-level competencies perform so much better as a talentmanagement tool?Because they provide greater detail, continuity, and simplicity than single-level competencies, andthese enhancements make competencies more practical and more versatile in the workplace.GREATER SIMPLICITYMany HR professionals assume multi-level competencies are more complicated to use. In fact,the opposite is true. For example, instead of applying three single-level competencies to threedifferent jobs, you can assign different levels of the same competency. This approach allows youto streamline the number of competencies you work with while achieving the depth and flexibilityyou need.BETTER COMMUNICATIONBreaking a competency into progressive levels of proficiency provides more accuracy and allowsmanagers and employees to see how a competency is expressed differently depending on the—3—

With multi-level competencies, you have clearlydefined behaviors that are expected at different jobsor job levels. The clarity of those definitions facilitates an objective evaluation for the manager, andprovides a framework for meaningful discussionsbetween the manager and the employee. Lorraine MacKay, Senior Vice-President,Professional Services, HRSGamount of experience, skill, and aptitude required for a particular job. This additional detail andcontext provides a shared language during discussions about performance and greater accuracywhen talking about specific workplace behaviors and expectations.More empowered employees. By enabling employees to see how the same competencies areexpressed at different proficiency levels for other jobs, multi-level competencies help them exploretheir potential and work towards lateral or upward career progression.Better HR coordination. Multi-level competencies connect jobs at every level—from entry toleadership—across the organization. Each competency level describes the observable skillsfor a specific job, but one competency can link different jobs vertically or laterally across theorganization. This helps HR professionals manage talent management more holistically andevaluate the organization’s current and future talent needs more confidently.—4—

Anatomy of a multi-level competencyWhat does a multi-level competency look like? This example of an HRSG competency for “client focus” provides a detailed look at the functional components.Client Focus1 Providing service excellence to internal and/or external clients.LEVEL 1LEVEL 2LEVEL 3LEVEL 4LEVEL 5Responds to immediateclient needsMaintains client contactProvides added valueProvides seasoned adviceEnsures continuedservice excellenceResponds to client needsin a timely, professional,helpful, and courteousmanner, regardless of clientattitude.Follows up with clientsduring and after delivery ofservices to ensure that theirneeds have been met.Looks for ways to add valuebeyond clients’ immediaterequests.Acts as a seasoned adviser,providing independentopinion on complex clientproblems and novelinitiatives, and assistingwith decision-making.Formulates strategies andprocesses to evaluateemerging and longer-termopportunities and threats tomeeting clients’ needs.Shows clients that theirperspectives are valued.Keeps clients up-to-date onthe progress of the servicethey are receiving andchanges that affect them.Addresses the unidentified,underlying and long-termclient needs.Pushes client to considerdifficult issues that are intheir best interests.Determines strategicbusiness direction to bestmeet clients’ evolvingneeds.Strives to meet servicestandards in allcircumstances.Maintains service to clientsduring critical periods.Enhances client servicedelivery systems andprocesses.Advocates on behalf ofclients to more seniormanagement, identifyingapproaches that meetclients’ needs as well asthose of the organization.Evaluates the clientservice model and servicestandards to identify areasfor improvement.Addresses clients’ issues inorder of priority.Anticipates clients’upcoming needs andconcerns.23411. The competency definition provides a high-leveldescription of the competency.Why five levels?22. The proficiency scale provides multiple proficiency levelsfor each competency. Each level reflects a progressionfrom a basic demonstration of the competency towards amore complex and strategic demonstration. For example,an entry-level employee may need to demonstrate level 1proficiency, while an executive may need to demonstratelevel 4 or 5. Proficiency scales help you comparerequirements across jobs, which is especially useful whendetermining potential career paths within the organization.33. The notion for each level provides a high-level summary ofWhy do the majority of HRSGcompetencies include five levels—and not three or seven or ten?This model is based on extensiveexperience across a wide range ofsectors and HR processes. Nearlythree decades of competencybased engagements have shownus that five levels provides enoughdetail and differentiation toenhance accuracy, while avoidingunnecessary complexity.the overall theme identified for that proficiency level.44. A behavioral indicator provides a clear description of theobservable behaviors that an employee will demonstrate on the job.—5—

Taking the first stepMuch has been written about the benefits of multi-level competencies. But it’sharder to find information on just getting started.There’s no shortage of research available about competency-based HR management processes.But because the research often focuses on mature processes, it usually doesn’t address theinitial implementation from the ground up. As a result, while most HR professionals recognize thevalue of competencies, many are unsure how to begin integrating competencies into their talentmanagement practice.In fact, taking the first step is simple. Whether you choose multi-level or single-levelcompetencies, and whether your objective is to manage change, strengthen organizational culture,improve retention, or anything else, the first step is always the same—develop job profiles.Job profiles are the foundation on which all competency-based activities are built, because theyidentify the specific competencies and proficiency levels that define success for a specific job.This makes competencies concrete and tangible in the workplace, giving you a common languagefor describing successful performance, whether that’s in the context of hiring, performancemanagement, career progression, or any other HR activity.A competency-based job profile consists of a group of competencies required for a specific job.When you use multi-level competencies, the profile will limit the expression of each competency tothe specific proficiency level required, lending greater clarity, focus, and utility to the profile.By utilizing a combination of general competencies—competencies describing the generalbehaviors required to perform effectively in a range of jobs—and technical competencies—competencies describing the application of knowledge and skills needed to perform effectively ina specific role or group of jobs—you can create highly targeted job profiles that focus both on the“soft skills” and “know-how” needed for successful performance.—6—

You can get leaders more engaged when they seethe relevance and the level of granularity that youjust don’t get with one-level competencies.At the micro level, it helps the employee direct theirown learning with the manager. At the macro level,it’s for workforce capability and planning. It’s reallybecome about big data for HR. Kristi Conlon, Senior Learning & Development Professional, IntelThe competency selection process may seem overwhelming when you consider that manycompetency vendors offer hundreds of competencies. HRSG, for example, maintains more than550 multi-level competencies, including technical, general, and leadership competencies, witheach competency containing five proficiency levels and 3-5 behavioral indicators per level.But with automated solutions such as the CompetencyCore Profile Builder, the process ofselecting competencies and applying them to profiles at the right proficiency level takes no morethan a few months.With profiles in place, you can apply competency-based management practices to any HRprocess. For example, you can improve the hiring process by using interview questions that relateto the competency at the specific proficiency level required for the job, or use proficiency levels toidentify performance gaps and assign targeted remedial training opportunities.Learn more about building job profiles using automated software: http://hubs.ly/y0fDN 0—7—

A blueprint for developing job profilesJust as a blueprint is needed to guide building a house, a competency architectureis needed to guide the development of competency-based job profiles.A competency architecture provides a common set of rules that create consistency andcontinuity across every job in your organization. If you omit this critical step and begin selectingjob competencies without those rules in place, you are likely to end up with profiles that aredifferent from one department to the next, and are less effective at supporting the goals of yourcompetency initiative.THE MOST COMMON TYPE OF ARCHITECTURE WILL INCLUDE FOUR COMPETENCY LAYERS:Core competencies are shared by every employee in the organization—from the CEO to the parttime temporary worker. Core competencies describe, in behavioral terms, the key values andstrengths that help an organization achieve a competitive advantage by differentiating itself fromits competitors.Job family competencies are shared by a ‘family’ of related jobs that have common functionsand form a logical career path. A job family may define a specific department or organizationalunit, but it may also define jobs across departments or units that share common tasks andfunctions. (For example, salespeople selling different products in different divisions may belongto the same job family.)Job specific competencies define the skills needed to perform effectively in a specific role orsubset of roles beyond those included in the job family competencies.Leadership competencies are used to define roles in an organization that involve managing,supervising or influencing the work of others in some way. Depending on the organizationalstructure or culture, leadership competencies may be reserved for a specific leadership team, orapplied more broadly to all employees.For information on the HRSG Competency Architecture Package, visit http://hubs.ly/y0fDPg0.—8—

Competencies across the talent lifecycleOne of the great advantages of multi-level competencies is their ability to creategreater consistency and continuity across the talent lifecycle—from hiring to careerprogression to succession planning.Let’s take a closer look at the way competencies can be applied to each phase of this lifecycle.HIRING AND INTERVIEWINGThe hiring process is more focused and productive when job profiles feature competencies,because competencies clearly communicate the ideal candidate profile to interviewers. Insteadof evaluating candidates based on vague qualities—”Must be client-focused”—interviewers canask questions that identify specific behaviors the candidate has demonstrated in prior workenvironments.Competencies are particularly valuable in the interview process because they help minimizebias and enhance objectivity by setting consistent criteria by which all candidates are evaluated.CompetencyCore, HRSG’s competency management software, aligns a set of interview questionswith each competency and proficiency level, so that interview guides can be easily created for anyjob in the organization. This is a great way to minimize the time and costs associated with theinterviewing process.Research shows that using pre-defined criteria results in a more valid selection process and agreater chance of predicting on-the-job success. A competency-based hiring process also helpsorganizations identify any shortcomings in the selected candidate, so that they can be supportedwith a focused development strategy as part of the on-boarding process.—9—

Managers want to help employees be successful.Employees want to enjoy success. But withoutthe tools to have a meaningful conversation andcreate the steps to improvement, there can be nosuccess.For example, an employee is told, ‘You should bea better team player.’ Their first question will be,‘Well, what do I need to do?’ And the manager is ata loss to describe what’s needed.Competencies provide those conversation tools,a common frame of reference, and concreteexamples to illustrate the behaviors required. Suzanne Massie, HRSG consultantPERFORMANCE MANAGEMENTPerformance management is an essential HR function, but it’s also a sensitive and oftenchallenging process. Multi-level competencies help to keep the discussions objective by providinga set of clearly defined and observable behaviors that are expected at different job levels orfor different jobs. This helps managers to articulate any shortcomings and provide actionablefeedback for employee improvement.Competencies support any type of performance-management approach, including total, teamdriven, continuous learning and coaching, and project-based performance management.LEARNING AND DEVELOPMENTOne of the biggest challenges in HR is determining the best learning resources and approachesto support employee growth. Competencies offer a framework that aligns learning resources andcurricula to expected proficiency levels. Once those resources have been identified and mappedto a specific competency and proficiency level, they can be applied across the organization to anyemployee who needs to improve in that area. By streamlining the development process, multi-levelcompetencies offer quick results and excellent ROI.Competencies are particularly effective in helping organizations support the development of“soft” skills. While gaps in technical skills are generally easier to identify, soft skills—such asanalytical skills, customer focus, planning and organizing, etc.—are harder to quantify. Multi-levelcompetencies define soft skills in concrete terms, offer a clear sense of progression from basic toadvanced proficiency, and help managers pinpoint and address deficiencies.—10—

EMPLOYEE ENGAGEMENTA competency-based framework gives employees the tools they need to align their skills andambitions with the needs of the workplace. With multi-level competencies, employees canvisualize their career progression, evaluate lateral or upward career opportunities, and take anactive role in exploring their career potential. And because learning resources can be aligned tospecific competencies and proficiency levels, employees can also see exactly what they need to doto reach the next level.GAP ANALYSIS AND SUCCESSION PLANNINGWhile competencies are ideal for addressing deficiencies at the employee level, they can also beused to identify organization-wide gaps in talent resources and build a more adaptable, highperforming workplace.By placing employees on a competency continuum, and by breaking each job down into aset of competencies and proficiency levels, managers can assess the readiness of potentialsuccessors to assume leadership roles and identify departments or business areas where existingcompetencies or proficiencies don’t meet current or future needs. Competencies make it easier tosee who could fill a specific job and how far away they are from being ready for the ANNINGCommunicate idealcandidate profileCommunicate jobexpectationsAssesscompetencies toidentify gapsCareerdevelopment toolsAssesssuccessors againstcompetencies (e.g.leadership profile)Select according tokey competenciesCoach tocompetenciesLearning plans toaddress gapsExpectedbehaviors clearlydefinedIdentify keycompetenciesneeded inworkforceCareerdevelopmenttools aligned withcompetenciesReinforce keycompetenciesStandardized toolsand methodsGOALSHire better qualityemployeesGreater jobknowledge &competenceQuick learningcurve and targeteddevelopment—11—Greater employeeretention &motivationBuild a highperformingworkforce

Supporting growth. Connecting the organization.How do you create a strong organizational culture during a time of rapid growth?For Berkshire Associates, multi-level competencies were the solution.A few years ago, Berkshire Associates, a human resources consulting and technology firm, hadmade a conscious move towards supporting a high-performance culture. But as the organizationgrew, that performance standard was harder to enforce and consistently apply.The feedback has been very positive. The leadershipteam are starting to see how this process will enhance their ability to not only appraise performancebut also focus on development and opportunities forgrowth among their staff. Michele Whitehead, Manager, Human Resources Services,Berkshire Associates“There was a big disconnect between what a manager in one part of the business defined ashigh performance compared with a manager in another part of the business. We needed to cometogether as a team and define what it meant for us across the organization to support a highperformance culture, while acknowledging that each job is unique and contributes in its own way.”Extensive research convinced Michele Whitehead, Manager of HR, that a multi-level competencystructure would enable Berkshire to support high performance consistently across both theirproduct development and consultancy departments.“It made sense that we could take this multi-level look at competencies and be able to clearlydefine the behavioral indicators for an entry-level consulting or development role and see whenthat person is ready to move into the next level.”Using HRSG’s multi-level competency content and expertise, Berkshire selected a set of corecompetencies that could be applied to every position in the organization. The multi-levelframework meant those core competencies could be expressed at different proficiency levelsdepending on the job hierarchy, while still connecting every employee to a shared set of values.CHALLENGESOLUTIONRESULT:Maintain consistency in agrowing organizationDevelop multi-levelcompetency profilesA shared organizationalculture of excellence—12—

Multi-level competencies: Myths and realitiesWhile competencies are now among the most widely used HR tools, misperceptionsstill swirl around the use of multi-level competencies.MYTH: THE BEST COMPETENCIES ARE DEVELOPED IN-HOUSE.REALITY: Developing quality competencies is a highly specialized skill. Some large organizationsmay have people with this skill set on staff, but in most cases, it’s more cost-effective to outsourcecompetency development to specialists. In the case of multi-level competencies, this is especiallytrue, because an understanding of competency design and implementation is required to achievethe best result.MYTH: MULTI-LEVEL COMPETENCIES ARE DESIGNED FOR USE IN BIG CORPORATIONS.REALITY: Originally, the use of competencies tended to be limited to the Fortune 500 because ofthe high cost of either developing competencies in-house or purchasing extensive competencylibraries from specialist consultancies. Today, affordable licensing arrangements and streamlineddeployment processes bring competencies within reach of any organization—even those with 200or fewer employees.MYTH: USING MULTI-LEVEL COMPETENCIES IS COMPLICATED AND TIME-CONSUMING.REALITY: In fact, multi-level competencies are easier to use, because they reduce the total numberof competencies needed to define every job in the organization and create a more connected,holistic picture of the organization’s talent resources.In addition, competency-management software can now be used to streamline and automatecompetency-based processes such as job-profile development, performance management,assessment, career progression, and more.—13—

MYTH: WITH MULTI-LEVEL COMPETENCIES, THE GOAL IS TO GET EVERY EMPLOYEE TOTHE HIGHEST LEVEL.REALITY: Multi-level competencies are designed to identify the right proficiency level for the job,not to grade performance against an ideal level. So, for example, a level-one proficiency may beall that’s required for successful performance in an entry-level job. In fact, even key leadershippositions may include a mix of proficiency levels for different competencies.MYTH: WITH COMPETENCY-BASED JOB PROFILES IN PLACE, COMPETENCY-BASED TALENTMANAGEMENT JUST “HAPPENS.”REALITY: It’s true that competency-based job profiles are the foundation for every competencybased talent management practice. But ultimately, they are tools—tools that need to be usedregularly and diligently before the organization will see improvements in employee satisfaction,organizational performance, and other success metrics.Multi-level competencies achieve the balance between continuity and culture,while also having the right degree of flexibility to tweak skills as new emergingskills are necessary. You can’t do that if it’s one level. Kristi Conlon, Senior Learning & Development Professional, Intel—14—

Context, continuity, and resiliencyMulti-level competencies help Eastman & Guare Consulting prepare their clients forthe needs of today’s workplace and tomorrow’s.Eastman & Guare Consulting builds customized solutions for organizational and personaldevelopment for a diverse clientele that spans virtually every sector, including education, themilitary, utility providers, healthcare, government, manufacturing, and consumer goods.While they have used competencies for some time as part of their client engagements, theyrecently shifted from single-level to multi-level competencies.Janet Eastman, one of the company’s founders, says clients are seeing real value in this additionalcontext and detail. “Having multiple levels means that we can give the client access to thedifferent levels of performance within a single competency. So it enriches their view of whatthat competency means beyond a one-sentence description and gives them a much clearerunderstanding of what the competency looks like.”Eastman says being able to express the competency at multiple levels is especially useful fororganizations that are choosing their core competencies—competencies that capture the corevalues and strengths shared by every employee.“Many of our clients struggle with successionplanning and they’re finding a lot of value inmulti-level competencies from that perspective.” Janet Eastman, Senior Consultant, Eastman & Guare“Using multi-level competencies allows our clients to visualize how a particular competency willlook when applied to everyone across the company,” she explains. “For example, leaders might beexpected to perform it at level four or five, while for entry levels, the requirements might be at levelone or two. But everyone is connected to that competency as part of the organizational culture.”Eastman & Guare clients are increasingly seeing multi-level competencies as a way to enhanceresiliency and grow capacity for the future. “Companies are looking for something to help themdevelop their employees for the future. Having an integrated system, where competencies are tiedto strategy, helps them align employee development with a five-year plan.”CHALLENGESOLUTIONRESULT:Help clients become morestrategic and resilientReplace single-level withmulti-level competenciesGreater organizational integration and preparedness—15—

6 best practices for developing competencybased job profilesJob profiles are the foundation of any competency-based initiative. Articulatingcompetencies and proficiency levels at the job level brings greater focus andcontinuity to the entire talent-management lifecycle.Based on more than two decades of experience guiding hundreds of competency initiatives—largeand small—to successful completion, HRSG offers these six recommendations for organizationsthat are planning to develop multi-level competency profiles and transition to a competencybased HR practice.1. START WITH A PILOT PROJECTCompetencies bring the greatest value when they’re applied to the whole workforce, but you don’tneed to do it all at once. Starting with a small pilot project is a great way to explore multi-levelcompetencies and adapt the competency content and profile-building process to the unique needsof your organization.For example: Many HRSG clients begin by selecting competencies for a small group ofrelated job profiles before rolling them out for the whole organization.2. IDENTIFY THE GOALHR professionals use competencies for many reasons. Some want to strengthen or changeorganizational culture, others want to reduce turnover or ensure consistent performanceacross different locations, and so on. Make sure you have a clear goal in mind before starting acompetency-based initiative, and take baseline measurements so you can gauge the effectivenessof the initiative post-launch.For example: A client who wants to improve the quality of new hires may choose tofocus on developing a profile for a particularly high-turnover role within the organization.The client will measure key organizational metrics such as the retention rate andperformance evaluations before the initiative gets under way, and after the profile hasbeen used to select new hires.3. LEVERAGE AUTOMATION TOOLSUsing tools such as spreadsheets, email, and Word documents to select and apply multi-levelcompetencies to job profiles can add to the challenge. Using next-generation software tools suchas HRSG’s CompetencyCore can streamline the process by helping you manage competencycontent, synthesize organizational input, and ensure a defensible, fully documented process.—16—

For example: HRSG’s CompetencyCore Profile Builder leads you through an automated,best-practice survey process for short-listing, reviewing, selecting, and publishingcompetencies at the right proficiency level for each job profile in your organization.Trying to determine what the competencies are and define them and then definethe behavioural indicators can potentially make this a very lengthy process. Byrunning the campaign in CompetencyCore, we’re able to make significant progressin a much shorter amount of time. Michele Whitehead, Manager of HR, Berkshire Associates4. ENGAGE STAKEHOLDERSDepending on the scope of your project and your organizational process, developing competencybased job profiles can require input from HR staff, managers, employees, executives, boardsof directors,

550 multi-level competencies, including technical, general, and leadership competencies, with each competency containing five proficiency levels and 3-5 behavioral indicators per level. But with automated solutions such as the CompetencyCore Profile Builder, the process of